Earning Date, Transcript Summary & Report

Strong Financial Performance: Total revenues of $79.2 million and adjusted earnings per share of $0.47 exceeded quarterly guidance, indicating strong financial performance.

SAP Solutions Revenue Surge: The SAP Solutions segment saw a remarkable 51% increase in revenues compared to the previous year, driven by strong software-related sales and increased sales investments.

Adjusted Gross Margin Improvement: The company reported a significant improvement in adjusted gross margin, rising to 47.7% from 43.3% in the prior year, primarily due to higher margin Gen AI consulting and implementation revenue.

Accretive Revenue Growth Impact: The acquisition of LeewayHertz contributed to accretive revenue growth in Q4 and is expected to have a significant impact on 2025 results, enhancing the company's Gen AI capabilities.

Gen AI Consulting Demand: The company is experiencing strong demand for Gen AI consulting and implementation services, with clients moving from awareness to budgeted projects, indicating a positive market trend.

Premium Gen AI Advisory Launch: The launch of a premium Gen AI solutioning advisory program is set to leverage the company's innovation and implementation knowledge, targeting AI leaders and enhancing service offerings.

Strong Cash Flow Generation: The company has a strong cash flow from operations, with $20.6 million generated in the quarter, allowing for continued investment in the business and stock buybacks.

Dividend Increase Announcement: A 9% increase in the annual dividend from $0.44 to $0.48 per share reflects the company's commitment to returning value to shareholders.

Strategic Growth in Gen AI: The company is strategically focused on recurring high-margin IP-related services, positioning itself for long-term growth in the Gen AI space.

Oracle Solutions Revenue Decline: Total revenues from the Oracle Solutions segment decreased by 6% compared to the same period in the prior year, primarily due to the post-go-live wind down of a large engagement, which is expected to impact Oracle momentum in the first quarter.

eProcurement Challenges Impact Growth: Weakness in the eProcurement practice partially offset the revenue growth in the Global S&BT segment, indicating challenges in this area despite overall segment growth.

Revenue Decline Projection: The company expects both Oracle Solutions and SAP Solutions segment revenue before reimbursements to be down when compared to the prior year, with a combined decline projected at 8% to 10%.

Net Income Decline: GAAP net income for the fourth quarter decreased to $3.6 million or diluted earnings per share of $0.12, down from $7.9 million or diluted earnings per share of $0.28 in the prior year, indicating a significant drop in profitability.

SG&A Expense Increase: The adjusted SG&A expenses increased to $18.4 million or 23.7% of revenues before reimbursements, up from $15.4 million or 21.6% in the prior year, reflecting higher costs associated with increased sales and incentive compensation.

Payroll Tax Impact: The company anticipates a sequential increase in U.S. payroll-related taxes and vacation accruals, which will temper the first quarter outlook for 2025.